The performance and costs disclosures contained in the KID and the methods by which they are calculated are strictly prescribed by the PRIIPs Regulation and differ from the ways in which Caledonia presents its own financial information. It may therefore be helpful to investors to understand these differences:

Performance – the KID presents stress, unfavourable, moderate and favourable performance scenarios which are derived from historic share prices with dividends reinvested (known as ‘Total Shareholder Return’). Caledonia measures its actual performance by its net asset value per share total return (‘NAVTR’). Further information on Caledonia’s NAVTR can be found in the monthly factsheets available on this website.

Costs – the KID presents a table of costs which incorporates items not included within Caledonia’s ongoing charges ratio, a measure of expenses prepared in accordance with guidance published by the Association of Investment Companies and broader market practice and published in Caledonia’s annual report and accounts. Broadly, these differences relate to Caledonia’s look-through share of the management costs of its underlying fund investments, certain transaction costs and performance-related compensation paid to its staff.

The purpose of a KID is to provide retail investors with standardised illustrations of theoretical risk and returns to enable the comparison of different investment products available across a very wide range of financial sectors. In the case of investment trust companies, these illustrations are based on daily share price total returns over the previous five years, which are then projected forward over various time periods and adjusted for risk. Equity markets have however experienced a period high returns and low volatility in recent years, which under the KID’s prescribed methodology could lead to projections which are potentially over-optimistic. We would therefore remind investors that past performance is not a reliable guide to future returns.

We believe that Caledonia’s NAVTR remains the most appropriate measure of our investment strategy and how we manage our portfolio focused on quoted and unquoted equities and funds, and we will therefore continue to report our actual performance on this basis, in addition to publishing a KID.

The EMT (European MiFID Template) and EPT (European PRIIPs Template) files may be downloaded from the links below. Note that these files are intended for use by fund houses and distributors to assist in disseminating fund information.